Why You Shouldn't Accept Guests Who Can't Pay for Themselves

It happens to all of us, one time or another. Someone is looking for a stay; however, someone else will pay on their behalf. The only major exception here is groups, which are a completely different matter altogether. A person unable to pay for their stay should be a major red flag, and you should only consider this if you are really desperate or able to make an exception for this one case. Here is why.

Typically, the main problem is there is a lack of trust between the lender and the guest.

A dorm bed at a hostel is significantly cheaper than a queen room at the Ritz Carlton. Depending on where you are, it can cost around the same as three Big Macs. So, someone unable to come up with that kind of money must have some kind of problem. This problem only worsens when you consider how easy it is to transfer money nowadays. In Europe, you just need the SWIFT and a few other code numbers. In Australia and New Zealand, you only need a mobile app. In the US, many bank apps make it easy to electronically deposit checks by just taking a picture. On top of all this, there is an ever-increasing number of P2P money transferring services such as Google Wallet, PayPal, Cash by Square, Venmo, and more.

So, considering how easy it is to send and receive money, you should question why the other person hasn't sent the money directly to the guest instead of you. Typically, the main problem is there is a lack of trust between the lender and the guest, which could be due to the guest prioritizing some things over the necessities of travel, such as an addiction to drugs, gambling, or worse. This can put your other guests' safety and security at risk. Even if that guest is just inept at handling his or her own money, this can lead to issues that completely affect your business.

Say they have a believable story, such as a guest being pick-pocketed and having no means of payment; then you must also consider your local laws in authorizing a third-party credit card authorization and payment. Some countries need a hard signature, whereas others require a form filled out with a copy of their card and a government ID. Some make it totally easy.

The reality of the issue is that if the story is legit, then you have no need to worry because they won't dispute the charge. If it is not, then you better make sure you are covered so you don't lose those funds later. Of course, your policies are there for a reason, and there should always be exceptions. Training your staff on the policies is a lot easier than training them on the ability to grant exceptions. However, as a general rule, it is safer for everyone—staff and guests alike—if you avoid guests who need someone else to pay for them.